Welcome to the Midsona Q2 Report 2021. Today, I am pleased to present CEO Peter Åsberg and CFO Max Bokander. For the first part of this call, all participants will be in listen-only mode, and afterwards there will be a question and answer session. I'll now hand over to our speakers. Please begin your meeting. Thank you so much. Peter Åsberg speaking. We can turn to page number two immediately. I would like to start by taking you through some of the highlights and explanations of the quarter behind us. It should be said that we did have a second quarter with challenging comparison figures, which was very much due to the hoarding that we saw in quarter two last year. Still, we think that there are some clear explanations for the performance. We think that there are a number of positives, and also, we have a strong action plan moving forward. By that, let's go to page number three in the presentation, where I will take you through the key developments. As already stated, we had tough comparison figures due to last year's product hoarding. It should be said that we were gradually improving in the quarter, so the start was weaker, and then we became stronger pretty much month by month. In the month of June, we actually had an EBITDA that was better than last year. That, we think, is a strong sign that our marketing and sales activities are working. It's also important to say that our own brands did comparatively better. Actually, if you look at the total portfolio of our own brands, they were slightly growing by 0.2%. A little different from what we're normally used to. Our prioritized brands actually were declining in the quarter, and those are the brands that have a big positive effect from COVID last year due to hoarding. It's mainly the dry organic products where we saw major uplift last year. What is doing comparatively better is the brands that did not do so well last year. It's many of our consumer health brands. Friggs has continued to do very well, and also our sports nutrition brands have done great during the quarter. I've been talking before about the rollout of our organic brands, Davert in Germany and Happy Bio in France and Spain in the grocery trade. This work has continued in the quarter. We have seen some good progress on that, although we were meeting the same hoarding figures as we have done for many other brands. We see that our program to roll out in the grocery trade across Europe is working, and it's gradually gaining speed. One positive is the fact that we have improved the gross margin in the quarter. Even though the improvements might not look as big as they appear, it should be mentioned that what we have in the numbers for this year is System Frugt. We were margin in the lower parts of the 20s, meaning that the actual improvement in gross margin is quite significant. This is some good mix effects. We are selling a better mix of products and also the program that we have for common sourcing to source our products cheaper. Also, food service was very depressed last year due to the fact that people spent more time at home. We see a good rebound in the food service business. We have stepped up our marketing investment in the quarter. We have actually increased it by SEK 12 million versus last year, which is quite significant. This has had a positive effect on volumes, but also quite a negative short-term effect on the profits. It was a good choice to strengthen our brands. We also have some unfavorable FX effects versus last year of about SEK 8 million. That makes up quite a big of the difference in profits versus last year. It should also be said that we have had service level issues in both Division North, i.e. Germany, and Division South, Spain and France. This is due to the fact that we have been out of stock for a number of raw materials. It's mainly products coming from Asia, China, India, and Sri Lanka, where it has been delayed quite a lot. We expect to see a gradual improvement in our service level as we go back to a more normal situation after the COVID epidemic. That was some of the key developments, we turn to page four. Most of this I've already talked about, Max will also talk about the numbers in some more detail. I think that the one thing that I still would like to mention is the EBITDA margin of 8.6%. Of course, comparing to last year, this is not so impressive. Last year was also very special, we think that a better comparison is Q2 in 2019, when we had an 8.4 EBITDA margin. Q2 is historically our weakest quarter, and then we got a big boost last year. That's also an explanation why the EBITDA margin is going down. We turn to page five. Here you see that we have quite a big positive effect from M&A, this is the acquisition of System Frugt. We are very happy with the progress that we're making in terms of integrating the company. It should be said that the first half year and also including the second quarter is significantly weaker compared to the second half of the year for System Frugt. The big seasons for nuts and dried fruits is in the autumn and especially in the Christmas. A lot of the Christmas sales are done in September, October, and November. We are looking at an uplift for System Frugt in the second half of the year. As you can see, our prioritized brands are down versus last year. Still, our total brand portfolio is slightly up, and this might sound contradictory. This is what I talked about before, that we are doing quite well with our consumer health brands, our sport nutrition brands, but we were cycling very high numbers for our prioritized organic brands. We sold a lot of dry products during the hoarding period last year. We go to page number six. Here we can clearly see the effect of the hoarding last year. We are down in the grocery trade because that's the channel where a lot of consumers were hoarding products. We're also down significantly in health food stores. What happened in the second quarter last year was that we had shutdowns in society. People went to nearby stores, and especially in France, Spain, and Germany, there are a lot of organic food stores which are smaller and closer to where people live. People shopped a lot of goods in those stores, and thereby the relatively big decline this year. On the positive side, the pharmacy trade is doing very well, w e have increased quite significantly. Of course, here we're cycling lower numbers, but we've also done some good launches, which we will talk about later in the presentation. A big rebound in food service. That's, of course, a sector that was very depressed last year, and we see now a month-by-month improvement in the food service area as societies are opening up again. We go to page number seven. This is something that I would like to emphasize and something that we're actually quite proud of. It might not seem a lot that our own brands have an organic growth of 0.2%, but we think that it is quite good under the circumstances due to the fact that we're recycling the hoarding numbers from last year. The programs that we have put in place have worked out very well, w e have made a number of launches that has worked out well. We're continuing our path to increase in the grocery trade in France, Spain, and Germany. This is quite good. Actively we're losing out is in licensed brands, w e have stopped a number of contracts with low margins, and that's also one of the reasons why we have a better mix and thereby a better gross profit this year. Also some of the licensed brands had tougher times than our own brands. That also speaks to the strength of our marketing programs, and t hen we have also lost sales in contract manufacturing. We think that there also was some customer hoarding last year, which drove sales of contract manufacturing. That's mainly private label products, and a lso, as discussed earlier, we have had supply issues, and of course, we want to supply all our customers, but from time to time when we had shortages, we have prioritized our own brands. Overall, the positive thing here is that our own brands are still increasing, although we have had this quite difficult situation. Page number eight. This I've already talked about. This is a key project of ours, something that is very important for the future. This is how we became very successful in the Nordics by moving our brands from the specialty stores out in the grocery trade. This is a process that we're now also going through in our main markets in Europe, w e've invested quite heavily in that, and w e see both good consumer response and customer response. Let's go to page number nine. As said, we are increasing with a number of our brands in consumer health, and one of them is Mivitotal. Mivitotal is an iconic Nordic brand of dietary supplements, but traditionally it has been liquid multivitamins that we have sold. What we have done now is to create a range of tablets. In total, it's 10 SKUs. You see six of them here on this page, but it's 10 in total, as said. We have gotten very good listings both in Sweden and Finland, and with intention to roll them out also in the other Nordic countries. Also very good consumer response. We see massive growth for the Mivitotal brand. Likewise, look at page number nine. Sorry, page number 10. We have done a relaunch of our SQ3 brand, meaning that we have done a design update, we have done a number of new products, and also created a new marketing concept for the brand. Here we do see strong growth. We have been able to counteract the negative hoarding effects from last year by taking a number of actions for our brands, which has actually meant that on total, we are increasing slightly for our brand portfolio. Page number 11. Sustainability is a big part of our company and something that we have worked on for quite some time. We're very happy that we now have what is called science-based targets. That's our way of reaching the Paris Agreement and contributing to that. Those targets have now been approved, and we have now started the work to actually make it happen. This is something that will be a focus for a number of years going forward. By that, we turn to page number 12, and I leave the word to CFO Max Bokander. Thank you, Peter, and I would like you to move to page number 13, the financial executive summary slide. Some of my comments will be a repetition of what Peter just walked through. In quarter two, we had a net sales growth of 5.1%, but with a negative organic growth of 4.2%. Last year's strong sales due to hoarding, but also increased household consumption were challenging to match. The gross margin, however, improved, mainly driven by a favorable mix as a result of our own brands developing better than the other business. The lower EBITDA is largely explained by already mentioned higher investment in sales and marketing, and also additionally, last year included a positive exchange rate revaluation effect. Regarding the items affecting comparability, it should be mentioned here that it's a net. The SEK 3 million includes also a write-off of intangible assets, which does not impact the EBITDA, where the one-offs then net to SEK 11 million instead of SEK 3 million. The free cash flow was during the quarter weak and impacted by the seasonal build of inventory, mainly within System Frugt, and timing of payments for supplier invoices. I will come back to all my above comments more in detail in the following slides. I now ask you to move to page 14, the sales bridge. The structural growth on 12% is represented by System Frugt adding SEK 104 million in sales, slightly also lower than last year pro forma, with the same comments as before, with tough hoarding comparison numbers. Besides already mentioned organic decline, the currency continued to have a negative translation effect for this quarter at 2.8%. I ask you to move to page 15. On this slide, you see the net sales growth of the last six quarters. Please note that the sale of own brands has during all these quarters been better than the average organic growth. I now ask you to move to page 16, where I will go through the results more in detail. In the upper graph, you see the gross profit and the gross margin development versus pro forma last year. Versus pro forma, we improved the margin with significant, I would say, 1.6 percentage points. Despite 8% lower sales versus pro forma, we almost managed to generate the same absolute gross profit. In the lower graph, you see the EBITDA development. It was SEK 23 million lower versus pro forma, driven by the lower gross profit and SEK 12 million higher investment in sales and marketing and the fact that last year included SEK 8 million in positive exchange rates revaluation effect. Worth mentioning is that during this quarter, we finalized the operational integration of System Frugt. Closer it was 1st of June. The realized synergies during the quarter, these were accounted to SEK 5 million, was though in the quarter to large extent offset by slightly higher integration costs than planned system costs, etc. These, of course, will not be repeated into forward quarters where we only will see the synergies. Please now move to page 17 and the summary of Nordics. For Nordics, the net sales grew with 15.7%, including a negative currency translation of 1.5%. The structural growth for Nordics amounted to almost 20%, where System Frugt at SEK 104 million in sales. The organic sales development was -2.6%, mainly due to challenging comparison in the sales channel grocery trade. As Peter mentioned before, worth noting is that food service and pharmacies are growing, of course, partly due to low comparison rates, but to be noted, they are also up versus Q2 2019, with 14% respectively 6%. EBITDA was down versus last year and is to large extent explained by the comments I just mentioned for the group. Please now move to page 18, the summary of North Europe. Here the sales declined with 10.2%, including a more larger currency translation negative effect of 4.5%. The organic sales development was -5.7%. Here also due to challenging comparison in the sales channel grocery trade and also health food stores. Also within North Europe, we see a strong recovery for food service and also here it's up versus 2019. EBITDA was weaker than last year following the lower volumes, but also due to some less flexibility in the production expenses when the business, at the same time as facing lower volumes, struggled with the service level due to disruption in the supply chain. Now please move to page 19, the summary of South Europe. For this division, the net sales declined with 12.1%, including a negative currency translation of 4.4%. The organic sales development was -7.7%, with this division facing even bigger challenge to match the last year's strong sales in grocery trade, and for them, a large sales channel, health food stores. However, we would like to highlight that Happy Bio rollout in the grocery trade continued to show organic growth also in this quarter. The EBITDA was weaker versus last year, from the lower gross profit and higher structural costs for the operations. The structural cost for future growth and running in independent divisions were not fully in place during last year. Now I would like you to move to my final page, number 20. During quarter two, we had a weak free cash flow. It was impacted in comparison with last year by System Frugt having a low EBITDA in the first two quarters, but at the same time needing to build inventory for the high seasons in end of quarter three and quarter four. This quarter was additionally negatively impacted by timing of payments to suppliers, partly as a result of ongoing activities to improve supply chains due to disruptions. Regarding the year-to-date cash flow, I would like to remind you what I mentioned in quarter one, where we then decided to cancel an expensive factoring both within System Frugt and mainly within System Frugt, to the level of SEK 67 million. With that, I would like to hand back to you, Peter. Thank you so much, Max. We move to page number 21, which is the summary and outlook page. This is pretty much the last page of the presentation. It might be repeating itself a little bit, but as said, we met tough competitor figures at the beginning of 2021. The last real hoarding month was April. We have seen gradual improvement both in competitive sales, but also EBITDA. Overall, our own brands are doing well under the circumstances. We have continued the successful rollout of Davert in Germany and Happy Bio in France and Spain. We also see increases in our consumer health portfolio with brands like Mivitotal and SQ3, and also continued growth for Friggs. The negative effects, as said, is primarily in organic dry foods. We will have the biggest positive effect in quarter two last year. We did set up marketing investment in quarter one and quarter two to support our launches, both in the Nordics and outside the Nordics, and also to take us through a tough comparison period. That was the focus on quarter two and the year so far. A couple of things that I would like to mention moving forward. We now have a strong focus on M&A again, t he M&A market has started to ease up. It's now easy to travel. There are more discussions ongoing, and there are more potential investment opportunities also. It is our ambition to now be out on the M&A path again during the second half of this year. It should also be said that in quarter three, we're meeting easier comparative figures, and we've also got back to a more normal marketing spend. In summary, we had a tough quarter two with tough comparisons. We think that under the circumstances, we have done well, w e are looking positive at the future, and we continue to drive our own brands to create this strong European company with a strong presence in the grocery trade for organic products across Europe. We also hope to come back with some news on M&A during the second half of the year. Thank you so much, and by that, I move to page number 22 and leave it open for questions. Thank you. If you wish to ask a question, please dial zero, one on your telephone keypads now to enter the queue. Once your name is announced, you can ask your question. If you find it's answered before it's your turn to speak, you can dial zero, two to cancel. Once again, that's zero, one to ask a question, or zero, two if you need to cancel. Our first question comes from the line of Johan Brown of ABG. Please go ahead. Your line is open. Thank you. Hi, guys. A couple of questions from me, and I'll take them one by one. Just an update here on the extra marketing costs here, a re we talking just the removal of these SEK 12 million sort of a time-limited marketing campaign, or are you still going to continue to have slightly higher marketing costs during the second half of the year as well? Not being exact, I would say that it would be in line with last year. Of course, we've added System Frugt with some extra marketing activities through the second half year, but in line or slightly higher versus last year. In quarter one,, we spent SEK 8 million extra, and in quarter two, SEK 12 million extra, and it will not be up at all to that extent in the second half of the year. Thanks. In regards to the North Europe division, you mentioned that you had a product range shift here and some trouble with overlapping. Is it possible to give some indication about the sales volumes lost during Q2? It's quite difficult to do that, but it is significant. One is the overlap that you were mentioning, but I think the big effect has been service level issues and supply chain issues, and t his is something that we've been working very hard on. Both demand and supply has been very erratic. We have had a number out of stocks for major products due to the fact we simply haven't gotten the raw materials in. This is, of course, due to the fact that the transportation chain, especially from Asia, has been disrupted during the second quarter. As said, our expectation is that it will improve gradually as COVID is downplayed. To be quite honest, we are very humble about this because we have seen so many ups and downs in this respect. That said, what we have been trying to do now is to have some extra safety stock for a number of key raw materials, so that should improve the situation looking forward. Thanks. Regarding the year-on-year growth in the EBITDA here in June, is it possible to say something about the organic growth in June as well? We don't typically give out those kind of figures. I would say that, I repeat the message that I did earlier, that there has been a gradual improvement in sales month by month, and of course, that is also reflected in the EBITDA. It has been improving month by month, and t he real hoarding was in April last year. There might have been heightened demand in certain channels, especially in countries like France, where you had more demand in the health food stores during these first months of the quarter. We will not give out a specific figure. As I said, a gradual improvement. All right, t hank you very much. A last question as well in regards of the gross margin and how you feel about the second half of the year here, where we do have a lot of supply chain issues and freight costs increasing and so forth. You mentioned that you have increased the inventory levels and so forth, but how do you see all of these costs bundling together after a very strong gross margin in Q2? How do you feel about your pricing power here if any costs were to continue to increase? Regarding the margin, we are dependent on the share of System Frugt still. For quarter three, there will be a pro forma adjustment that leads that the margin will go down compared to quarter two. We still see. Expect to see an underlying improvement in the underlying business also for Q3. If we look at the margin, exact comparison Q2 with Q3, since the System Frugt will have higher sales and they are on the lower margin, it will go down as a comparison with Q2. However, we see good signs for being able to continue a better margin than last year. Pricing power, of course, that's difficult to discuss. There are windows of negotiation. It's in the 1st semester of the year, and there is in September. I don't want to predict it too much regarding that. All right. What I would like to add to that is that generally, when it comes to raw material price increases, we will price to those. As Max was saying, there might be a lag effect, which then, of course, might go in both directions because it takes some time to get price increases or decreases through the system. Maybe in the comment on the raw materials, we have not yet been exposed to significant raw material cost increases. There are some trends, however, short term, we have a positive effect because we have quite high inventory in certain areas. For sure, when it comes, we will focus on passing it on to the customers as well. Great. Thank you very much. That was all of my questions. Thank you. Our next question comes from the line of Johan Dahl of Danske Bank. Please go ahead. Your line is open. Thank you, g ood morning. Just a question on last year, you had these maintenance stops, I think, in European operations. Could you just clarify how you're planning for that this year in the year-on-year comparison? Also, if there are any positive effects on ops which we should be aware of here in the comps last year? If you look at maintenance stops, we traditionally do one in France every year, t hat was done in the second quarter. What you see in this third quarter is that you have normal vacation period in all European countries. It might be July in some countries, August in others, but that's exactly the same as last year, so I see no difference in that respect. There are no planned longer maintenance stops in quarter three, no. Are there any in Q4 that you want to talk about? No, not at the current moment, no. Just on the growth, if you just zoom out a little bit and look on Midsona's group performance first half last year and the first half of this year, I guess the growth year to last year is fully offset by the decline this year. Still we talk a lot about these positive trends out there. Also, I'm just thinking, if you were to highlight sort of the weak spots in the system, it seems to be a bit of the licensed brand. What's your strategy for those licensed brands forward? What's sort of at risk here in your licensed part of the portfolio? If you could also address the sort of supply issues, I would presume that's neutral from a competitive standpoint with the supply issues. I guess being a large player, you'd be preferred sort of receiver of goods in some sense. Can you just highlight how that has played out? If it fell through among your customers that is really weak, or what is actually happening here? Yes, I will try and explain or answer those questions. If you start with the first in terms of the mix by sales type. Overall, I would say that our brand portfolio is doing well and that we are increasing. As you have seen, licensed brands has had a very negative development in this quarter, but also in quarter one. There are a number of license agreements that has not been renewed, and many of them were at very low profitability levels, and then there were demands for even lower margins from our side, which we declined. That means that in the Nordics, we have a few brands that are in sales quite significant, but in margin, very insignificant, that we've just stopped selling. The effect that you see in the second quarter, this is something that will continue more or less year out. It will vary a little bit by quarter because we have some quite important licensed brands that we still carry, like the Compeed brand, which we're very happy about, and a brand that we will continue to drive, and some other brands. As you have seen also, we have quite a huge decline on contract manufacturing. We have been doing a lot better with our own brands compared to contract manufacturing. It's hard to give a good picture of what is driving that. Of course, one would maintain that our sales and marketing efforts have worked, so our own brands have done better than the private label brands. There are some competitiveness out there, so we have lost a few contracts because prices were too low, so we couldn't continue those contracts, and we stopped them. I would maintain that our brand portfolio focus continues to develop well. Although 0.2% in growth might not seem a lot, it's quite good considering the circumstances that we had during quarter two. When it comes to supply issues, yes, I would say that we do have preferred status. What has happened is that, I can take an example from Sri Lanka, where we take a lot of products. When workers don't come to work because of the pandemic or fields are closed down, then it does not matter if you have preferred status because there is no one there to harvest the raw materials. Also we have seen major disruptions in transport chain. I think that this is something that goes across almost all industries, that there is lack of containers in China and India and other places in Asia. There have also been disruptions when products are entering Europe because the harbors have been full, so we haven't been able to unload. This is something that we've been working on and working quite hard on. I would say that, as Max was saying, we have also increased our safety stocks where we could do that. That has improved the situation a little bit. I think it looks better now, but a s said, it has been very erratic, the whole supply chain and supply chain patterns. We are still very humble about that, and this is something that we operationally work on day by day to improve. As said, as the pandemic hopefully becomes less of a force, we think that the situation will improve. Okay. If I understand you correctly, Peter, you're saying that sell-through among grocery trade for these products is down due to supply chain issues? It's not that you're worse affected than anyone else. Sorry, one more time. What did you say now? Can I just move on to another issue? On cash flow, you talked about new regulation. We also saw this issue on factoring, which you fixed here in the quarter. If you look forward, given this new regulation and potential new factoring reversals, how much cash flow do you plan for being tied up in the group? The factoring have had a one-off effect, unless we start with factoring again, which is not in the plan, and to certain limits also not allowed in our bank contracts. Factoring have had the impact and will not impact further. This new regulation that is a European directive for all businesses within agriculture or food is new. It was finally decided in Sweden the 10th of June, there are then saying that all payments must be done within 30 days. This is still too early to assess the impact for us. You don't see the effect in the numbers at the moment from this. As we said in the report, we are now digging deep into this, and will be able to come back later together with the Q3 report, how this will impact us. Our cash at the end of the Q2, we had available funds about plus SEK 300 million. I guess the reason for mentioning it, I guess, is because it's material and I'm just thinking if you can have any interval or any idea without giving any specific guidance on this issue. No, it's too early to assess. I don't want to give a number which I don't feel comfortable about at this stage. I will come back to that in the Q3. Okay. This closure of the facility in Jort, you talk about some extra cost here in the third quarter. How much are you planning for and what will be the efficiency gain from that in your plans? As we mentioned in the plan, it's a smaller facility, a smaller factory. It has been losing EUR 100,000 a year, and that's why we're closing it. The benefits will be around that plus something more. There is a building that we own. We need to be able to sell that or discontinue it, t hat could be part of the restructuring cost. There are a few people leaving. It's a smaller business, i t will not be material impact, but we want to show sometimes the numbers, even though if it's small, it's a disruption, and it's difficult to quantify the synergies or the benefits in a financial business case for these smaller businesses. It's the right decision to close it, and we move the profitable products to our current facilities. The closure impact will, as I will communicate, be limited. Okay, g ot you. Very clear. Final question. Just on this 2025 in the marketing and sales investment you've done in H1. Correct me if I'm wrong, but that's aimed at driving instant sales, right? In terms of consumer demand. It's not any sort of CapEx project as such to drive volumes at a later stage. Just a clarification. No, it's not a CapEx project, but it is, I would say, a long-term investment in our brands to solidify their positions in the market where we're launching the grocery trade in Europe. Also to strengthen our brands in the Nordics and support some of the launches and relaunches that we've made recently. There's no CapEx. They have had a positive effect in Q2, but I think more so looking forward. Yes. I guess these campaigns, they should drive volumes immediately, right? Why should it drive volumes in H2, apart from brand awareness? I think that it's a long-term build-up. What you do when you launch in new markets, you have to create awareness for the brands, and that's quite a slow process. This is not something that's happening. It's not that you do instant activation where you put down the price or something like that or other campaigns. This is more long-term marketing of the brands and a way to show both, especially customers also, that we are very serious about the launches that we're making and that we're here for the long term. I would say that they have more of a long-term effect in that sense. It's not the classical promotion that we have done. Thank you very much for those answers. Thanks. Thank you. Once again, if there are any further questions, please dial 01 on your telephone keypads now. Okay, there seems to be no further questions at this time. I'll hand back to Åsberg for the closing comments. Then I would simply say thank you, and we will continue to work down the path of becoming the leading European company in health and wellbeing. We look forward to update you again after the quarter three report. I wish you all a very nice summer. Thank you so much.